nep-sea New Economics Papers
on South East Asia
Issue of 2011‒08‒15
thirteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Direct and Indirect Determinants of Obesity: The Case of Indonesia By Romling, Cornelia; Qaim, Matin
  2. Green Fiscal Policy and Climate Change Mitigation in Indonesia By Budy P. Resosudarmo; Abdurohman
  3. The Political Economy of Reducing the US Dollar’s Role as a Global Reserve Currency By Yap, Josef T.
  4. Why did the Peopleâs Development Bank of Mozambique fail? Lessons from successful government development banks from Asia and Africa By Manganhele, Anina Trefina
  5. Teacher Certification in Indonesia: A Confusion of Means and Ends By Mohamad Fahmi; Achmad maulana; Arief Anshory Yusuf
  6. What Drives Different Types of Capital Flows and Their Volatilities in Developing Asia? By Mercado, Rogelio; Park, Cyn-Young
  7. Decomposing the great trade collapse : products, prices, and quantities in the 2008-2009 crisis By Haddad, Mona; Harrison, Ann; Hausman, Catherine
  8. Challenges in Mitigating Greenhouse Gas Emissions: The Importance of Policies for Fossil Fuel Combustion By Budy P. Resosudarmo; Frank Jotzo; Arief A. Yusuf
  9. Asian tigers in nanotechnologies: evolutionary path of scientific production of People’s Republic of China, Japan and South Korea By Finardi Ugo
  10. Structuralist macroeconomics and new developmentalism By Pereira, Luiz C. Bresser (Luiz Carlos Bresser)
  11. Modern food retailers and traditional markets in developing countries: Comparing quality, prices, and competition strategies in Thailand By Schipmann, Christin; Qaim, Matin
  12. Real Exchange Rates and Growth Surges By Darryl McLeod; Elitza Mileva
  13. Supply chain differentiation, contract agriculture, and farmersâ marketing preferences: the case of sweet pepper in Thailand By Schipmann, Christin; Qaim, Matin

  1. By: Romling, Cornelia; Qaim, Matin
    Abstract: Overweight and obesity are becoming serious issues in many developing countries. Since undernutrition is not completely eradicated yet, these countries face a dual burden that obstructs economic development. We analyze the nutrition transition in Indonesia using longitudinal data from the Indonesian Family and Life Survey, covering the period between 1993 and 2007. Obesity has been increasing remarkably across all population groups, including rural and low income strata. Prevalence rates are particularly high for women. We also develop a framework to analyze direct and indirect determinants of body mass index. This differentiation has rarely been made in previous research, but appears useful for policy making purposes. Regression models show that changing food consumption patterns coupled with decreasing physical activity levels during work and leisure time directly contribute to increasing obesity. Education, income, and marital status are significant determinants that influence nutritional status more indirectly. Change regressions underline that there are important path-dependencies. From a policy perspective, nutrition awareness and education campaigns, combined with programs to support leisure time exercise, seem to be most promising to contain the obesity pandemic. Women should be at the center of policy attention.
    Keywords: Obesity, Overweight, Nutrition Transition, Asia, Indonesia, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, I10, O12,
    Date: 2011–06
  2. By: Budy P. Resosudarmo (Indonesia Project, The Arndt-Corden Department of Economics, Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Abdurohman (The Arndt-Corden Department of Economics, Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia)
    Abstract: In common with other archipelagic countries, Indonesia is vulnerable to such impacts of climate change as prolonged droughts, increased frequency in extreme weather events, and heavy rainfall resulting in floods. These threats, coupled with the fact that Indonesia has been declared one of the three biggest greenhouse gases emitters, has induced the Indonesian government to place a high priority on climate change issues. In particular, the government considers its fiscal policy to be a key instrument in both mitigating against and adapting to climate change. This paper reviews Indonesia's implementation of green fiscal policies and discusses recent Indonesian fiscal policy responses to its commitment to reduce its emissions by 2020. In general, one can conclude that although progress has been made in the area of green fiscal policy in Indonesia, a more vigorous approach is needed to protect Indonesia's environment and to cope with the new challenges of controlling CO2 emission in the era of climate change.
    JEL: H30 H23 H61
    Date: 2011–08
  3. By: Yap, Josef T. (Asian Development Bank Institute)
    Abstract: Many have argued that the major source of the existing global macroeconomic imbalances are the twin deficits of the United States (US). However, there is still a debate about whether the global imbalances indeed pose a significant threat to the world economy. This paper analyzes whether current efforts in East Asia in terms of financial and monetary cooperation and rebalancing of economic growth could significantly mitigate the adverse impacts of a global system that will still be dominated by the US dollar in the foreseeable future. It also explains why the People’s Republic of China is unlikely to make significant unilateral adjustments to reduce global macroeconomic imbalances.
    Keywords: east asia; global macroeconomic imbalances; rebalancing economic growth; financial and monetary cooperation
    JEL: F31 F33
    Date: 2011–08–04
  4. By: Manganhele, Anina Trefina
    Abstract: Despite many decades of experimentation with supplier-led approaches to credit in many developing countries, limited success has been achieved in terms of improving access to credit for smallholder farmers. In the case of Mozambique, previous attempts by government to improve access to credit for farmers were not successful and the government is looking for more effective strategies. The purpose of this study is to examine experiences in other developing countries in Africa and Asia. The study is a multiple case studies selected from Zimbabwe, Thailand and Indonesia. The data collection method comprised a combination of primary collected through in-depth interviews with key informants and secondary sources. The data analysis techniques consisted of searching for themes regarding successful strategies in terms of dealing with costs and risks of lending to agriculture. Lessons from these cases were drawn to shed light on what the most effective intervention strategy for the Government of Mozambique could entail if it is to succeed to improve access to credit for smallholder farmers. The study concludes that an alternative strategy by the government to improve access to credit for smallholder farmers includes the re-establishment of a public rural bank. The study recommends that rural financial institutions should adopt a demand-driven approach, and the fundos do fomento (special development funds) need to be reformed.
    Keywords: smallholder farmers, access to agricultural credit, government intervention, Mozambique and other developing countries, Financial Economics,
    Date: 2010–09
  5. By: Mohamad Fahmi (Department of Economics, Padjadjaran University); Achmad maulana (Department of Economics, Padjadjaran University); Arief Anshory Yusuf (Department of Economics, Padjadjaran University)
    Abstract: In 2006, Indonesia started implementing a nation-wide program of teacher certification with the aim to certify as many as 2.3 million teachers in 2015 with the budgetary cost of as much as US$460 million. Despite the magnitude and the importance of this program, there has been no quantitative study to evaluate the impact of such program on student’s achievement. In this study, we conducted a teacher survey in the Greater Bandung Area and collected the information on average national exam scores of the students of certified and not-certified teachers. We use two different impact evaluation techniques namely Propensity Score Matching (PSM) and Difference-in-Difference (DD) to evaluate the impact of certification. Both methods suggest that teacher certification has no impact on student’s achievement. The certification program may have improved teacher’s living standard as remuneration increase is an elemental part of it, yet its formally-stated goal to improve the quality of education as should be indicated in better students’ performance may not have been achieved. This program, being the largest in the nation’s history, may have confused means and ends.
    Keywords: teacher certification, propensity score matching, impact evaluation, Indonesia
    JEL: J31
    Date: 2011–07
  6. By: Mercado, Rogelio (Economics Department, De La Salle University-Manila); Park, Cyn-Young (Asian Development Bank)
    Abstract: Understanding the determinants of capital inflows is essential to designing an effective policy framework to manage volatile capital flows and their disruptive potential. This paper aims to identify factors that explain the size and volatility of various types of capital flows to developing Asia with regard to other emerging market economies. The estimates for a panel dataset show that per capita income growth, trade openness, and change in stock market capitalization are important determinants of capital inflows to developing Asia. Trade openness increases the volatility of all types of capital inflows, while change in stock market capitalization, global liquidity growth, and institutional quality lowers the volatility. A regional factor plays an important role in determining the size and volatility of capital inflows in emerging Europe and merging Latin America, suggesting that regional economic cooperation and policy coordination may be an important element in designing a policy framework to manage capital inflows in merging economies.
    Keywords: capital flows; volatility of capital flows; panel data; developing Asia; push and pull factors
    JEL: F21 F32 F36
    Date: 2011–07–01
  7. By: Haddad, Mona; Harrison, Ann; Hausman, Catherine
    Abstract: The authors identifies a new set of stylized facts on the 2008-2009 trade collapse that they hope can be used to shed light on the importance of demand and supply-side factors in explaining the fall in trade. In particular, they decompose the fall in international trade into product entry and exit, price changes, and quantity changes for imports by Brazil, the European Union, Indonesia, and the United States. When the authors aggregate across all products, most of the countries analyzed experienced a decline in new products, a rise in product exit, and falls in quantity for product lines that continued to be traded. The evidence suggests that the intensive rather than extensive margin mattered the most, consistent with studies of other countries and previous recessionary periods. On average, quantities declined and prices fell. However, these average effects mask enormous differences across different products. Price declines were driven primarily by commodities. Within manufacturing, while most quantity changes were negative, in most cases price changes moved in the opposite direction. Consequently, within manufacturing, there is some evidence consistent with the hypothesis that supply side frictions played a role. For the United States, price increases were most significant in sectors which are typically credit constrained.
    Keywords: Markets and Market Access,Access to Markets,Economic Theory&Research,Emerging Markets,Commodities
    Date: 2011–08–01
  8. By: Budy P. Resosudarmo (Indonesia Project, The Arndt-Corden Department of Economics, Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Frank Jotzo (Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Arief A. Yusuf (Economics Department, Padjadjaran University Author-Name: Ditya A. Nurdianto; Indonesian Ministry of Foreign Affairs)
    Abstract: Indonesia is among the largest 25 carbon dioxide emitting countries when considering only fossil fuels, and among the top three or five when emissions due to deforestation and land use change are included. Emission per capita from fossil fuels are still low in comparison with other countries, but have been growing fast, and are likely to overtake those from deforestation and land use change in the future. This paper argues the importance for Indonesia to start developing strategies to mitigate its emissions from fossil fuel combustion. It analyses the main drivers of the increase in emissions, identifies the options and challenges in reducing the future growth in emissions. Policy options are reviewed that would enable the Indonesian economy to keep on growing, but with a much lower carbon output.
    JEL: Q54 Q40
    Date: 2011–08
  9. By: Finardi Ugo (University of Turin and National Research Council, Ceris - Institute for Economic Research on Firms and Growth, Moncalieri (TO), Italy)
    Abstract: Nanosciences and nanotechnologies (NST) are a developing scientifictechnological area in full expansion and evolution. Their character of General Purpose Technology has been assessed. Asian countries play a relevant role in the evolutionary path and growth of NST, as in some cases they present a rapid growth of scientific production. This work analyzes the performance of three of such countries – People’s Republic of China, Japan, South Korea – emphasizing several aspects of their performance in scientific production and putting in reciprocal relations these aspects. Results show a different behaviour of Japan – which starting from a dominant position is loosing ground with respect to its competitors – and of the other two countries which are catching up. Insights on the internal organization and on the mutual relations are also offered, together with a comparison of the relation with other important areas of NST scientific production.
    Keywords: nanotechnologies, nanosciences, evolutionary trends, People’s Republic of China, Japan, South Korea
    JEL: L6 O31 O33
    Date: 2011–06
  10. By: Pereira, Luiz C. Bresser (Luiz Carlos Bresser)
    Abstract: This paper, first, presents some basic ideas and models of a structuralist development macroeconomics that complements and actualizes the thought of structuralist development economics that was dominant between the 1940s and the 1960s including in the World Bank. The new approach focus on the relation between the exchange rate and economic growth, and develops three interrelated models: the tendency to the overvaluation of the exchange, the critique of growth with foreign savings, and a model of the Dutch disease based on the existence of two exchange rate equilibriums: the “current” and the “industrial” equilibrium. Second, it summarizes “new developmentalism” – a sum of growth policies based on these models and on the experience of fast growing Asian countries
    Date: 2011–08–04
  11. By: Schipmann, Christin; Qaim, Matin
    Abstract: Supermarkets and hypermarkets are expanding rapidly in many developing countries. While consequences for farmers and consumers were analyzed recently, little is known about the implications for traditional retail formats such as wet markets. Using data from a market survey in Thailand and hedonic regression models, we analyze quality and prices for fresh vegetables from different retail outlets. Compared to wet markets, modern retailers sell higher quality at higher prices, indicating that they are primarily targeting better-off consumers. Hence, they are not directly competing for the same market segments. Yet there are signs that modern and traditional markets will gradually converge.
    Keywords: supermarkets, modern retailers, traditional wet markets, product quality, vegetables, Thailand, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, C21, L15, Q13,
    Date: 2011–04
  12. By: Darryl McLeod (Fordham University, Department of Economics); Elitza Mileva (European Central Bank)
    Abstract: Maintaining a weak real exchange rate is a widely recommended growth strategy, in part because of the success of Asian exporters, most recently China. Simulations of a simple two-sector open economy growth model based on Matsuyama (1992) suggest that a weaker real exchange rate can lead to a "growth surge", as workers move into traded goods industries with more "learning by doing" and exit non-traded goods sectors with slower productivity growth. Using the updated total factor productivity (TFP) estimates from Bosworth and Collins (2003) we test this model in a panel of 58 countries. We find the anticipated non-linear relationship between the real exchange rate and TFP growth: beyond a certain point real currency depreciation reduces TFP and GDP growth. Manufacturing exports appear to be one channel via which the real exchange rate affects TFP growth. Fears that a weaker real exchange rate might reduce investment and therefore productivity growth by making imported equipment more expensive are not supported by our estimates.
    Keywords: Economic growth, total factor productivity growth, exchange rate policy
    JEL: O14 O41 O47 O57
    Date: 2011
  13. By: Schipmann, Christin; Qaim, Matin
    Abstract: There is an emerging body of literature analyzing how smallholder farmers in developing countries can be linked to modern supply chains. However, most of the available studies concentrate on farm and farmer characteristics, failing to capture details of institutional arrangements between farmers and traders. Moreover, farmersâ preferences have rarely been considered. Here, we address these gaps by analyzing different market channels for sweet pepper in Thailand. Using data from a survey and choice experiment with farmers, we find that there is a general preference for marketing options that do not involve a contract. Additional provision of inputs and credit can increase the attractiveness of contracts. Yet, the most important factor for farmers is to personally know the buyer they deal with, which may be related to issues of trust. Some policy implications are discussed.
    Keywords: Choice experiment, contract design, farmersâ stated preferences, modern agricultural supply chains, Thailand, Community/Rural/Urban Development, Institutional and Behavioral Economics, International Development, L14, O31, Q12, Q13,
    Date: 2011–04

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